This form of remuneration supplements an employee’s fixed salary, offering additional earnings based on performance metrics, company profitability, or achievement of specific goals. Examples include bonuses awarded for exceeding sales targets, commissions earned on closed deals, profit-sharing distributions tied to the organization’s financial success, and stock options granted for long-term value creation.
Such pay structures incentivize employees to enhance productivity and contribute directly to the organization’s overall success. They also foster a culture of accountability and reward high achievers. Historically, these supplemental payments have evolved from simple bonuses to sophisticated plans designed to align employee interests with strategic business objectives, ultimately enhancing employee engagement and retention.
